$PCG powers profits for bulls

Option traders have doubled their money on upside positions in PG&E.

On Feb. 8, Investitute’s proprietary programs flagged the purchase of 6,500 June $20 calls in one print for $1.05 with shares at $14.41. Open interest in the strike was only 928 contracts before the trade occurred, showing that it was a new position.

Those calls traded for as much as $2.18 today, more than twice their purchase price. The stock rose 24.29% in the same time frame, a large move but nowhere near that of its options.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

PCG was up 2.65% to $18.21 today. Citigroup upgraded the California utility to Buy from Neutral with a $31 price target yesterday morning.

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